At the beginning of each week I look at ASIC's short position report in order to find out which shares are being targeted by short sellers.
This is because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn't quite right with a company.
With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:
- Inghams Group Ltd (ASX: ING) remains the most shorted share on the ASX despite a decline in its short interest to 16.7%. The poultry producer has been targeted by short sellers due to concerns that the drought will lead to higher input costs and squeeze its margins.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest remain flat at 15.7%. With the retailer's shares up 28% since the start of the year, short sellers may believe that they are overvalued now.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest fall to 15%. Last week the graphite miner's shares crashed lower again after it downgraded its second quarter production guidance and revealed further weakness in pricing.
- Nufarm Limited (ASX: NUF) has short interest of 13.3%, which is down sharply week on week. Some short sellers may believe the agricultural chemical company's shares have bottomed now and have closed positions.
- Orocobre Limited (ASX: ORE) has short interest of 12.7%, which is down slightly week on week. The lithum miner's shares came under pressure last month after mining giant SQM warned that lithium prices could fall a further 20% this year.
- NEXTDC Limited (ASX: NXT) has 12.3% of its shares held short, which is down sharply since last week. The data centre operator appears to have been targeted due to its premium valuation and concerns that it may not deliver growth that justifies this.
- Galaxy Resources Limited (ASX: GXY) has short interest of 12%, which is down notably since last week. With this lithium miner's shares down significantly since the start of the year, some short sellers may believe they have now been oversold.
- Bellamy's Australia Ltd (ASX: BAL) has seen its short interest drop down to 11.6%. Short sellers have been targeting the infant formula company due to the extensive delays it has faced in gaining SAMR accreditation for its organic infant formula.
- Metcash Limited (ASX: MTS) has 11% of its shares held short, which is down week on week once again. Unfortunately for short sellers, Metcash's shares pushed higher last week when it announced a new supply agreement with Drakes Queensland.
- BWX Ltd (ASX: BWX) has seen its short interest fall to 9.8%. The personal care products company has come under pressure this year after reporting a sizeable decline in the sales of its key Sukin brand.
